According to real estate consultancy agencies, there are fewer actual property offers than anticipated, despite the fact that sales increased significantly in the second half of last year as property prices fell. According to ValuStrat, 24,613 residential units were built in 2019, accounting for only 58% of the residential supply planned for 2019.
Atif Rahman, director and partner of Danube Properties says that there is no reason to be concerned about market oversupply, as he believes that a balance in supply and demand has been achieved. He continues by stating that the government’s policy of attracting more property and business investments, as well as talented specialists, will result in continued home sales growth. He says, “Every step that Dubai’s government is taking, such as trade and migration reforms are moving the real estate market towards the increase in demand for property.”
According to the stats, the oversupply has resulted in further price declines in Q4 of 2019.
“For the last 15 years, the problem of oversupply has always been discussed, but more than half of Dubai has been built over the last 15 years and most of the properties have been sold,” said Abdulla Bin Sulayem, CEO, Seven Tides International.
Abdulla Bin Sulayem added that the increase in demand for real estate in Dubai will attract approximately AED 122 billion in investment and create approximately one million jobs over the next five years, boosting the emirate’s overall property market.
It is also expected that the upcoming Expo 2021 will boost Dubai’s property sales and rents when foreigners return to invest, live, and work in the city.
According to Chris Hobden, despite the challenging situation created by the decline in rents for landlords, Dubai continues to ensure high rental yields for long-term rentals. The 10 most popular communities offer returns of between 6-9.5%, while major global cities such as London or Hong Kong currently offer rental yields of less than 5%.